7.1.46 1099 Reporting

Policy

The following payments must be reported on a 1099 form (as required by the IRS):

Payments made to an individual who is not employed by the University.

Payments made to a sole proprietorship.

Payments made to a partnership for services or rents.

Payments made to a corporation ONLY when the payment is for medical or health care services

The University mails 1099 forms when the cumulative calendar year 1099 reportable income is $600 or more. The 1099 form should be received by January 31st of the following year.

All 1099 reportable income received by an individual, sole proprietorship, or partnership must be included in the Miscellaneous Income section of their tax return. They should report all 1099 income, even if it is less than $600.

What is reportable on a 1099 form?

Payments made directly to performers (not to a booking agency or a corporation)

Payments to speakers

Payments to consultants

Awards

Civil Service and Administrative/Professional awards

Prizes

Payments to volunteers for research

Payments to corporations for medical or health care service

Payments to professionals (physicians, attorneys, etc.)

What is NOT reportable on a 1099 form?

Payments to individuals employed by the University, including students (these payments must be made through Payroll and are reported on a W-2 form). Please see the Employee vs. Independent Contractor policy to help determine whether or not an individual should be paid as a University employee rather than as an independent contractor. If there are further questions on this topic, please contact Payroll at 438-7677.

Scholarships, fellowships, and awards for students (these are reported to the Financial Aid Office so they are included with the student's other financial aid).

Scholarships or fellowship grants that are for teaching, research, or other services (these are wages and are reported on a W-2 form).

Guidelines

Reporting on 1099 forms is the responsibility of the Comptroller's Office, however, fiscal agents (Budget Officers) should be aware of the following:

Any invoice voucher containing a 1099 reportable payment must have the correct Taxpayer Identification Number (TIN) typed in Box 2 of the Invoice Voucher form. For individuals, this number is their social security number. Without this number, 20% of the payment must be withheld and mailed to the IRS.

Since 1099 reporting is not required for corporations (except for corporations providing medical or health care services), it is important to include the appropriate word or abbreviation after the vendor's name on the invoice voucher. Any of the following words or abbreviations will indicate to the Comptroller's Office that a vendor is not 1099 reportable because of its corporation status. These include: “Corporation,” “Company,” “Incorporated,” “Limited,” “Chartered,” “P.C.,” or abbreviations of these terms.

It is important to include a current mailing address on the invoice voucher for 1099 reportable payments, because this address will be used to mail the 1099 tax form the following year.

If the payment is not to an individual, but to a corporation or department, do not make the check payable to the individual representing the corporation, department, etc. If you do this, the Comptroller's Office will assume that the money is for the individual, and the individual will be sent a 1099 form.

The 1099 tax forms are mailed by January 30th of the following year. The University is not required to mail a 1099 to individuals who received cumulative payments of less than $600 during the calendar year. It is the responsibility of the individual to report all 1099 income, even if it is less than $600.

One copy of the 1099 forms is sent to the IRS by the Comptroller’s Office (a copy is no longer sent to the State of Illinois). The deadline for sending the IRS copy is February 28th of the following year. If you receive an incorrect 1099, or a 1099 form was not received when it should have been, contact the Comptroller's Office before the last week of February. This will give the Comptroller's Office time to make corrections on the IRS copy.

There are special rules and regulations for payment of 1099 reportable income to foreign individuals. Please contact the Comptroller's Office at (309) 438-5667 for further information.